REBA Inside Track: how benefits are evolving to meet changing business needs
The benefits design landscape has drastically changed in just three years. We have moved rapidly from the Covid-19 pandemic straight into a cost-of-living crisis, combined with labour and skills shortages.
There is no manual on how to deal with the highest inflation in a generation coupled with cost pressures on business, while needing to attract, retain and develop new skills, in a competitive talent market.
Talent shortages are having a major impact on benefits design, according to nearly two-thirds of the employers responding to REBA’s Benefits Design Research 2023, while as many as eight in 10 expect pay inflation to affect strategies during 2023.
Although almost all believe benefits help them to recruit and retain, most (59%) say benefits are ineffective at driving reskilling, and four in 10 say they do not drive performance.
Sustainability and transformation underpin design decisions
Our data shows that for most employers, culture and wellbeing are still the primary purpose of benefits. This is possibly why these results predict that new employee value propositions (EVP) and cultures will have a rising impact on benefits strategies. Just one-fifth saw culture and EVP highly impacting benefit design during 2020 -22, but this rises to almost half (48%) expecting this during 2023.
The impact of changes in working practices, such as hybrid working, is beginning to settle, with fewer than half of employers saying these changes will have a big impact in 2023, down from 74% saying this has affected them in the past three years. In contrast, business sustainability, diversity, equity and inclusion (DEI) factors and HR transformation, are all moving up the agenda.
This research finds that fairness will be a major driver of future benefits decisions. Just over half plan to fill benefits gaps for lower grades; one-quarter plan to reduce the waiting period on joining for benefits; seven in 10 will introduce or increase benefits choice, flexibility or personalisation; while one-fifth will extend benefits availability to employees’ dependents. A further two-thirds either have, or plan to, introduce or extend, benefits to support diversity, such as gender health support and benefits for neurodivergent employees.
Technology will drive future direction
To both offer the personalisation needed to support the differing needs of all employees and to collect the data required to justify the value to the business, employers need good quality technology platforms and data analytics. This is still a clear stumbling block. While well over half (59%) of respondents plan to add more choice or flexibility to their benefits packages there are concerns about the adequacy of benefits technology, with four in 10 respondents suggesting their platforms require significant attention.
In addition, the research found that three-quarters of employers intend to introduce or increase metrics and analysis of benefits use. Again, this data will be hard to access without the underlying technology in place.
The ability to truly understand and measure the effectiveness of benefits design strategy will become more vital as pressures on costs increase. Nearly three-quarters of respondents say that business cost pressures were affecting decisions, a significant jump on the 50% who said this was the case during 2020-22.
In summary, we predict a highly active period of review and benefits design change to meet fast-changing business and economic needs.
Want to hear more on this topic?
Join your peers at REBA Wellbeing Congress on 22 June, where you will learn, share and be inspired about how to embed employee experience and wellbeing at the heart of reward and benefits decisions.